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They cited the instance of Dell having
faced a decrease in sales especially in notebook computers
as its rival HP’s notebook computers had become more
popular. HP, which sold its products online as well as
through retailers, had argued that its multi-channel
approach of selling its products held an advantage because
it gave customers a chance to test the product.
But, Dell announced that the retail store would include
products only for display and inventory would not be stocked
as the store would not sell its products. Dell planned to
stick to its direct marketing model so that it could avoid
the risk of stocking products. Dell spokesperson Venancio
Figueroa said, “The DNA of the business model stays the same
for us,” “We see these as extensions of the kiosks. The
kiosks have performed well over time, and we want to
experiment with a larger space.” 4 |
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Dell’s retail stores would offer 36 products providing a range of Dell’s
home theatre products like computers, digital cameras, printers,
televisions, big- screen TVs, notebook computers, and other equipment. The
customers had to buy the product through ordering online from Dell’s website
or through the phone.
Also, the retail stores would provide office assistance to customers for PC
repair and setting up of a network. In the early 1990s, Dell sold its
products through a number of retailers like Best Buy, Costco and Sam’s Club.
But this practice was ended in 1994 as Dell cited low profit margins through
this distribution model.
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[4]
Fred O’Connor, “Dell Opens Shop,” www.pcworld.com, May 24, 2006.
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